Bills could mean less frequent audits for smallest towns

Sara Gilbertson has a limited amount of money to spend on maintaining her Battery Park community's clubhouse, infrastructure and grounds keeping. She would like to spend less of the community's money on audits for annual budgets that do not exceed $250,000.

"To get a good audit costs anywhere between $10,000 and $15,000," said Gilbertson, president of the Battery Park Citizens Association, which has 180 residents in Bethesda. "We had a hard time finding someone just to do our audit."

As a result of the neighborhood's concerns, bills in both the Maryland House of Delegates and Senate could reduce the number of audits required for very small communities with only a few hundred residents.

House Bill 19 and Senate Bill 146 would allow state-chartered communities with annual revenues less than $250,000 to have independent audits for the state performed only once every four years. Communities chartered by counties could have independent audits every four years if annual expenditures are less than $250,000. Currently, only communities with annual revenues or expenditures less than $50,000 can have independent audits every four years, as opposed to every year.

Montgomery communities potentially affected by the legislation include Barnesville, Brookeville, Drummond, Glen Echo, Laytonsville and Oakmont. According to the Maryland Department of Legislative Services, a sample of municipalities and special taxing districts with revenues between $50,000 and $250,000 showed they spent an average of $3,400 a year on independent audits the last three years.

Del. C. William Frick, House Bill 19's sponsor, said the previous $50,000 threshold had become outdated because of the cost of accountants, which can account for 10 percent of the budget for small areas. He also said the communities had to submit some financial information to the state annually, regardless of the proposed change in the law.

"There's still a lot of oversight," said Frick (D-Dist. 16) of Bethesda.

Barbara Moskowitz, chairwoman of the Town of Oakmont, which consists of about 150 residents living on Oak Place and the south side of Oakmont Avenue west of Old Georgetown Road, said she supports the idea behind change.

With annual town revenues of about $60,000, Moskowitz said the town only spends a few hundred dollars a year on independent audits, but could use the money to upgrade the curb on the side of Oakmont Avenue or bury power lines.

"I think it's appropriate to have an audit every three years," Moskowitz said. "That's how long our terms of office are."

Despite the bill's intention to save money for smaller communities, Mayor Danny Mendelson of the Village of Drummond, located on a portion of Drummond Avenue with approximately 125 residents near the Town of Somerset in Chevy Chase, said the town will continue to have annual audits.